Wednesday, August 5, 2020

Nord Stream 2: Germany is wavering at the sight of US sanctions

The CAATSA sanctions have been aggravated and  can also hit german companies and indivuduals writes german Newspaper Welt:

"The federal government's response sounded ready to fight: the United States, with its threats of sanction against the Nord Stream 2 pipeline project, disregarded "the right and sovereignty of Europe to decide where and how we obtain our energy". European energy policy, said Federal Foreign Minister Heiko Maas (SPD), was not made in Washington: "We clearly reject extraterritorial sanctions."
US Secretary of State Mike Pompeo tightened the Countering America’s Adversaries Through Sanctions Act, CAATSA for short, by a July 15 decree. This meant that European companies helping to complete the gas pipeline between Russia and Germany were immediately exposed to the risk of American sanctions. Or to put it more clearly: in order to weaken Russia geostrategically, the US is targeting its European trading partner.
Business representatives such as Michael Harms, Managing Director of the East Committee of German Business, and parliamentarians from the Union and the SPD called for action to be taken. Only: It's not that easy. From a legal point of view, the situation is far less clear than it seems according to the Federal Government's statements.
It is already controversial whether the US government's threatened action is a case of "extra-territorial" sanctions, as claimed by the federal government. Then it would be particularly problematic under international law. However: "The CAATSA's catalog of sanctions does not focus on any measures in foreign territory," says Till Holterhus, international lawyer at the University of Göttingen.
In fact, the CAATSA almost exclusively lists sanctions that would be enforced in the US, such as entry bans, exclusion from the US market, or confiscation of US assets.
The Federal Government is still examining how it will react - and apparently does not want to rule out anything: "The factual effects of the adjustments to CAATSA include the potential prevention of a project that is being carried out in Europe under European law," the Foreign Ministry explains on request: "With that these sanctions have a strong extraterritorial effect. "
Of course, the US was aiming for an extraterritorial effect with its domestic measures after the CAATSA, says Holterhus. "However, to conclude from this a breach of sovereignty and thus a violation of the important prohibition of intervention is at least a fine line from an international law perspective."
The case is even more complex in the special international law area of ​​world trade law. As members of the World Trade Organization (WTO), the United States is obliged to the EU to comply with the agreed trade rules. "Even on US territory," Holterhus notes, "the discriminatory sanctioning of goods and services from other companies would be fundamentally inadmissible for security reasons".

The fact that the USA is always arguing with security interests in the dispute over the Russian pipeline does not help them legally here, says the Göttingen expert: It was only recently, in the course of a dispute settlement between Russia and Ukraine, that states decided "to put up trade barriers only extremely." could justify narrow borders with their national security interests. "
A complaint to the WTO could be promising, or a lawsuit in the US courts. The only prerequisite for this would be that the sanctions were not only threatened, but imposed. If the US leaves the threat because it has already had the desired success, there is no such option.
"The threat of sanctions against German companies is undoubtedly an unfriendly act", Holterhus summarizes the legal situation. "From an international law perspective, however, it is at least a difficult gray area." A solution to the transatlantic conflict over Nord Stream 2 is therefore primarily in diplomacy."

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